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Customer Loyalty, Repurchase and Satisfaction: a Meta-Analytical Review Management, Marketing and Operations - Daytona Beach David B. O'Malley College of Business 2011 Customer Loyalty, Repurchase and Satisfaction: A Meta-Analytical Review Tamilla Curtis Embry-Riddle Aeronautical University, [email protected] Russell Abratt Nova Southeastern University and University of Witwatersrand Dawna L. Rhoades Embry-Riddle Aeronautical University, [email protected] Paul Dion Susquehanna University Follow this and additional works at: https://commons.erau.edu/db-management Part of the Business Administration, Management, and Operations Commons, International Business Commons, Marketing Commons, and the Strategic Management Policy Commons Scholarly Commons Citation Curtis, T., Abratt, R., Rhoades, D. L., & Dion, P. (2011). Customer Loyalty, Repurchase and Satisfaction: A Meta-Analytical Review. Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior, 24(). Retrieved from https://commons.erau.edu/db-management/18 This Article is brought to you for free and open access by the David B. O'Malley College of Business at Scholarly Commons. It has been accepted for inclusion in Management, Marketing and Operations - Daytona Beach by an authorized administrator of Scholarly Commons. For more information, please contact [email protected]. CUSTOMER LOYALTY, REPURCHASE AND SATISFACTION: A META-ANALYTICAL REVIEW Tamilla Curtis, Embry-Riddle Aeronautical University Russell Abratt, Nova Southeastern University and University of the Witwatersrand Dawna Rhoades, Embry-Riddle Aeronautical University Paul Dion, Susquehanna University ABSTRACT powerful impact on firms’ performance by providing a competitive advantage The purpose of this article is to (Edvardsson, Johnson, Gustafsson and investigate the relationship between customer Strandvik 2000; Lam, Shankar, Erramilli and loyalty, repurchase/repurchase intent and Murthy 2004; Reichheld, Markey and Hopton satisfaction in order to attempt to resolve the 2000; Zineldin 2006), numerous loyal mixed views on these concepts. A consumers (Mellens, Dekimpe and quantitative review of loyalty-repurchase- Steenkamp 1996; Zineldin 2006), and satisfaction constructs was conducted to increasing customer satisfaction. Despite identify the strength and direction of the extensive research on the relationships researched relationships and the influence of between customer loyalty, repurchase and possible moderating factors affecting those satisfaction, these constructs appear to be relationships. The Hunter and Schmidt complex and multidimensional, and are, (1990) meta-analytical technique and therefore, not well understood. software were employed. The results While one stream of loyalty- demonstrate that loyalty and satisfaction satisfaction research indicates that loyalty has indicate strong positive relationships (0.54). a strong association with different aspects of Repurchase and satisfaction display a consumer satisfaction (Ashley and Varki complicated relationship, which confirmed 2009; Boshoff 2005; Butcher, et al. 2001; the view that satisfaction does not explain Carpenter and Fairhurst 2005; Law, et al. repurchase behavior. Repurchase intent and 2004; Taylor and Hunter 2002; Yang and satisfaction display strong positive Peterson 2004), other researchers have relationships in the meta-analysis (0.63) and suggested that not all aspects of loyalty are moderator analyses. Loyalty and important to build consumer satisfaction (Floh repurchase/repurchase intent indicate the and Treiblmaier 2006; Genzi and Pelloni strongest positive relationship (0.71) among 2004; Harris and Goode 2004; Kandampully all conducted analyses. This study provides and Suhartanto 2000; Shankar, et al. 2003). value to managers dealing with customer Oliver (1999) proposed six types of satisfaction, loyalty, and repurchase by relationships between satisfaction and loyalty. presenting a detailed overview of these three All these relationships rise from different concepts, and relationships between them. definitions and perspectives on satisfaction and loyalty. On one end of the spectrum, INTRODUCTION satisfaction and loyalty are two manifestations of the same concept. At the other end, satisfaction and loyalty are very distant. Customer loyalty, repurchase and Oliver (1999) demonstrated that ultimate satisfaction are among the most researched loyalty can totally encompass satisfaction, concepts in academia and among the most satisfaction and loyalty can overlap, but also important constructs in practice. Loyalty, that satisfaction does not necessarily repurchase and consumer satisfaction have a 2 Meta Analysis transform into loyalty and can indeed exist studies, few marketing researchers have without the latter. employed this type of analysis to investigate Loyalty-repurchase research recorded customer satisfaction. The few examples different observations as well. While a include Orsingher, et al. (2010) and number of researchers argue that loyal Szymanski and Henard (2001). consumers return to purchase goods or The primary purpose of this study is to services (Taylor and Hunter 2002; Lee, at al. identify whether satisfaction leads to loyalty 2006), others have argued that high formation, which, in turn, leads to repurchase repurchase rates do not necessarily indicate behavior. The result of this meta-analysis will loyalty, while low repurchase rates do not help to determine the strength, magnitude, always indicate disloyalty (Dick and Basu and direction of hypothesized loyalty- 1994; Peyrot and Van Doren 1994; Rowley repurchase-satisfaction relationships. While and Dawes 2000). all reported relationships are positive, the Establishing a direct link between strength of the relationship does vary. Our repurchase and satisfaction ratings has not research addresses existing conflicts in the been easy for many organizations (Mittal and literature, and attempts to resolve the existing Kamakura 2001), and some researchers have mixed views on the studied demonstrated that this link can be weak concepts. Further, in the process of (Homburg and Giering 2001; Kumar 2002; collecting studies for the quantitative analysis, Quick and Burton 2000; Seiders et al. 2005; we have identified the fact that there is a lack Shih and Fang 2005). Jones (2006) pointed of published empirical work on the loyalty- out the importance of communicating the repurchase relationship which some scholars level of customers' satisfaction to the consider especially important. company's shareholders, either in the This article first provides an overview company's annual report, or in its letter to the of the conceptual foundations of loyalty, shareholders, as an overall indication of the repurchase and satisfaction, and their firm's performance. However, satisfaction by relationships. An overview of the meta- itself may not correlate with organizational analysis technique is presented next with the performance. Customers may indicate that database development and method of they are satisfied, but purchase goods and analysis. The results, research findings, services elsewhere (Powers and Valentine discussion and the study implications are 2008). On the other hand, the positive link stated at the end. between customer satisfaction and the profit of corporations was confirmed by a number of CONCEPTUAL FRAMEWORK researchers (Anderson, Fornell and Lehmann 1994; Anderson and Mittal 2000; Edvardsson, The conceptual framework provides et al. 2000; Fornell 1992; Hallowell 1996; an overview of existing research on Reichheld, et al. 2000; Soderlund and Vilgon satisfaction-loyalty, loyalty-repurchase, and 1999). satisfaction-repurchase relationships, and With all this confusing and identifies the need for conducting a meta- contradictory evidence, additional research is analysis. needed to further the understanding of these constructs and their relationships (Leingpibul, Satisfaction-Loyalty et al. 2009). The objective of a meta-analysis is to For years companies have invested synthesize previously reported statistical significant resources to improve their findings. Although meta-analyses are customers’ satisfaction (Durvasula, et al. frequently conducted for medical research 2004). Customer satisfaction indicates the Volume 24, 2011 3 general health of the organization, its future various types of loyalty while investigating its prospects, and provides companies with many relationship to satisfaction. Furthermore, benefits including forming consumer loyalty, researchers have also concentrated on preventing customer churn, reducing satisfaction as the independent variable marketing costs, and enhancing business without taking into account different types of reputation (Fornell 1992). The success of the satisfaction. firm’s strategy depends on the company’s Two main views emerged from the ability to fulfill its promises to consumers, literature review of the satisfaction-loyalty which in turn leads to forming long-term, relationship. The first view concluded that profitable relationships (Carpenter and satisfaction is the main driver of consumer Fairhurst 2005). Chow and Zhang (2008) loyalty (Dixon et al., 2005; Fornell 1992; proposed that it is important for managers to Genzi and Pelloni 2004; Mittal and Kamakura identify satisfying product attributes from 2001; Szymanski and Henard 2001). dissatisfying ones, because brand switching is Heitmann et al. (2007) stated that satisfaction more likely to occur as a result of positively affects loyalty, willingness to dissatisfaction. Satisfaction, as an recommend, and word-of-mouth. Further, independent
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